iMac questions

I've been researching for quite a while about getting an apple iMac.
I've got so many questions to ask as I'm really not sure which to get.
I'm leaning towards getting the 21.5" screen as they're cheaper and I don't need as big a screen as 27". But on apples website, they come in 2 forms, the difference being:
The cheapest having 500gb hdd + 256mb graphics card
OR
For nearly £300 more you get 1tb hdd + 512mb graphics card

I'm a massive sims 3 fan and have all the expansion packs, so would be larger gpu be worth the extra pennies?

500gb of hdd won't be enough for my needs, but I don't think 1tb will be enough either as I plan to download films, tv programs etc and stream them using apple tv.
So am thinking about buying an external hdd to put all my tv and hd video files on - will the streaming speed be effected if the files are saved on an external hdd?

I also wanted to get time capsule - say for instance, I opt for the 500gb iMac and get a 1tb external hdd. If I buy a 2tb time capsule, will it be able to backup both the internal and external HDD's?

If anyone can help, it would be much appreciated.
Thanks

According to this the Sims doesn't seem to need much - 128MB is the minimum.
The Sims 3 – Mac requirements now posted! | Simprograms
More graphics means you can run games at higher resolutions and more detail smoother. For some people it is worth it, others not so much.

The iMac is a little more involved in upgrading the hard drive - if you know you need the space I would recommend buying the upgrade from Apple unless you like taking apart computers. See hear for getting into a 27"
iMac Intel 27" Teardown - iFixit

Check the refurbished section too.

You can back up external drives via time machine but if you are getting large externals - it may just be better to clone them to multiple drives than to try to use time machine to back them up.

Streaming shouldn't be a problem for DVD quality through a USB. Streaming MKV seems to work over gigabit ethernet from external USB too. the Apple TV works fine for streaming data over wireless that is encoded for it. I.E. I have a dedicated 802.11N network at 5GHz and my Apple TV will stream netflix and my itunes movies with little problem at 720p.

Sorry, I think you have mis-understood, I don't plan on taking the iMac apart (I'd be way to scared to take it apart - incase I broke it!), I just thought about attaching an external HDD to give myself some more storage space on top of the 500GB internal HDD.

The only concern I have is, if the video files are saved on the external Hard Drive, will the streaming process slow down because it has to go through a USB/Firewire cable. Especially with HD footage, as they'll be ++GB's in size.

No - I understood - I am saying that taking apart the machine is hard - so if you want a larger hard drive - buy it from Apple. I said

If you know you need the sapce I would recommend buying the upgrade from apple...

Click to expand...

And I said

Streaming shouldn't be a problem for DVD quality through the USB.

Click to expand...

and blah blah blah past that for other formats/qualities.

I do need to clarify - I have a PC with USB hard drives attached - and I stream from the Hard Drives across the network over gigabit ethernet no problems. Wireless is a little harder so if I am streaming to wireless devices I usually use converted videos that I encoded via handbrake. HD streams OK from the USB Hard drives over Gigabit as well. HD doesn't really work well with wireless for me. Some have mentioned having some luck with wireless but I really haven't been able to stream HD (over 720p) over wireless very well.